PayPal launches its bitcoin payment service | The echoes

Payment in cryptocurrency from a PayPal account will become a reality. The American payment giant announced on Tuesday that its customers who hold bitcoin, ether, bitcoin cash and litecoin in their PayPal digital wallets will soon be able to convert their holdings into fiat currencies to make purchases among the 29 million partner merchants. The company clarified that it will not charge any transaction fees for this service but only one type of crypto per purchase can be used. "This is the first time you can seamlessly use cryptocurrencies in the same way than a credit card or debit card in your PayPal wallet,” CEO Dan Schulman told Reuters ahead of an official announcement. Via this service, “Checkout with Crypto”, network merchants will be paid in their local currency after PayPal has converted the sum into US dollars according to the standard conversion rate defined by the company.

After allowing its customers to keep and hold cryptocurrencies, PayPal is therefore launching the second stage of streamlining cryptocurrencies as a common payment method. But PayPal isn't the first payment app to offer cryptocurrency support. In 2018, its competitor Square launched Bitcoin support on the Cash app. But with 377 million users, PayPal is a key player in the sector and is paving the way for large-scale use of cryptocurrencies.

Bitcoin as a means of payment

And again, PayPal had an immediate effect on the cryptocurrency market, especially bitcoin which gained over $1,000 shortly after the announcement.

PayPal's ambitions in cryptocurrencies had already participated in launching the bullish momentum of bitcoin last fall, when the digital currency was still evolving around 10,000 dollars, against more than 58,000 today. Spurred by increased interest from big financial firms who are betting on greater adoption and viewing it as a hedge against inflation, bitcoin has already doubled in value since the start of 2021.

PayPal's launch comes less than a week after Tesla announced it would start accepting bitcoin payments for its cars. Unlike PayPal transactions where merchants will receive fiat currency, Tesla said it will keep bitcoin used as payment. While the fledgling asset is gaining traction among traditional investors, it has yet to become a widespread form of payment, in part due to its continued volatility.

By offering to convert bitcoin into fiat currency, PayPal hopes to reduce the risk of volatility that weighs on merchants. “We believe this is a transition period for cryptocurrencies to move from being an asset class that you buy, hold and/or sell to a legitimate funding source to transacting in the real world with millions of traders,” Dan Schulman said.

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